Construction poised to resume, city considers hazard pay for workers

Construction professionals are divided about the measure’s impact and cost

TRD New York /
Apr.April 30, 2020 07:10 PM
Lou Coletti, Laurie Cumbo and Felice Farber

Louis Coletti, Laurie Cumbo and Felice Farber

In two weeks, nonessential construction is expected to restart in parts of New York. But before Gov. Andrew Cuomo lifts his state of emergency order, the City Council wants to ensure essential workers — including those on construction sites — receive hazard pay.

A bill sponsored by Council member Laurie Cumbo would require essential businesses with more than 100 employees to give hourly workers an extra $30 to $75 per shift during the pandemic. Many forms of construction are considered essential, including affordable housing, infrastructure, work on healthcare facilities and work that supports other forms of essential business.

The General Contractors Association of New York expressed skepticism about how well the bill would work.

“While we understand the sentiment of this proposal, it would increase the cost of construction at a time when tax revenues are down dramatically and essential capital projects are being postponed and at risk of being canceled,” senior director Felice Farber said in a statement.

Grocery store owners, whose workers would also receive hazard pay under the proposal, had similar thoughts about the measure. They said they understood the need to reward frontline workers during the pandemic but that the cost of the measure could force them to close their stores and fire workers. Mayor Bill de Blasio has endorsed the idea of hazard pay but has indicated that the federal government should foot the bill.

Brian Sampson, president of the Associated Builder and Contractors’ New York chapter, said the additional costs would likely fall to owners due to force majeure clauses in contracts. But some smaller owners may struggle to cover those costs in the interim. He also pointed to public projects that are not subject to collective bargaining agreements. (Projects that have such agreements are excluded from the Council’s bill.) The extra costs, he said, would be passed on to taxpayers. Still, Sampson acknowledged the sentiment of the measure.

“I get what they are trying to do, and I appreciate the effort and concern for the essential workers,” he said.

The Building and Construction Trades Council, an umbrella group for construction unions, declined to comment on the proposal. Building Trades Employers Association President Louis Coletti said there was “no need” for hazard pay, pointing to the safety of his members’ sites.

“With respect to coronavirus mitigation protocols, [we] have developed and continue to develop the most comprehensive policies in working with REBNY and the Building Trade unions to ensure worker and public safety,” he wrote in an email.

Brendan Schmitt, a partner in Herrick’s real estate department, said responsibility for additional costs would vary on a case-by-case basis, depending on whether the construction contract stipulated maximum costs for work. He noted that decreases in productivity from shutdowns of sites and from virus-prevention measures on those that remain open — will likely prove a greater cost burden than extra pay for workers would.

“The $60 is nothing to sneeze at, but it’s probably not going to move the needle in the way that social distancing rules have,” he said.

With just two weeks until the governor plans to lift aspects of the “New York on Pause” order, Barry LePatner, founder of construction law firm LePatner & Associates, questioned the logic of rolling out hazard pay requirements this late in the game. He said he expects construction sites throughout the state to be up and running by the end of May.

“Construction always leads the economy out of the recession. It’s always the largest employer,” he said. “If you want to jumpstart the economy, you want to put lots of workers back to work at high-paying jobs.”

Write to Kathryn Brenzel at kathryn@therealdeal.com and Eddie Small at es@thereadeal.com


Related Articles

arrow_forward_ios
An aerial view of a pop-up drive-in theater built in the parking lot at the Broadway Commons in Hicksville, New York (Getty)

Covid pummeled shopping centers, but their parking lots are thriving

Covid pummeled shopping centers, but their parking lots are thriving
The number of mortgage borrowers in Covid-19 forbearance plans ticked down again this week. (iStock)

3M homeowners remain in forbearance

3M homeowners remain in forbearance
Mayor Bill de Blasio and the Lucerne Hotel at  201 West 79th Street (Getty; iStock; Google Maps)

Lawsuit blasts NYC’s “capricious” Covid-19 homeless response

Lawsuit blasts NYC’s “capricious” Covid-19 homeless response
Gap CEO Sonia Syngal (Getty)

Gap Inc. will close 350 stores and exit malls entirely

Gap Inc. will close 350 stores and exit malls entirely
(iStock)

Dead weight: A breakdown of NYC’s rental listing glut

Dead weight: A breakdown of NYC’s rental listing glut
The National Multifamily Housing Council’s monthly payment tracker found that 90.6 percent of those households paid some rent by Oct. 20. (iStock)

Rent collections in market-rate apartments stagnate in October

Rent collections in market-rate apartments stagnate in October
Gov. Andrew Cuomo (Getty; iStock)

New York City lifts lockdown for some Covid hot spots

New York City lifts lockdown for some Covid hot spots
SL Green CEO Marc Holiday and 420 Lexington Avenue with Scabby the Rat (Getty; Google; SL Green)

Peace prevails: SL Green, Local 79 settle dispute over protests

Peace prevails: SL Green, Local 79 settle dispute over protests
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...